If you can pay the unreasonable price, you must need the product more than others - Miriam V.

>Subject: "Gouging is Good" Now it's OIL, next up--- Water
>Date: Sat, 10 Sep 2005 16:31:48 +0000
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>FOR IMMEDIATE RELEASE
>SEPTEMBER 7, 2005
>CONTACT: Foundation for Taxpayer and Consumer Rights
>Jamie Court, 310-392-0522 ext 327; Tim Hamilton, 360-
>495-4941
> >
>Internal Memos Show Oil Companies Intentionally
>Limited Refining Capacity to Drive Up Gasoline Prices
> >
>SANTA MONICA, California - September 7 - The
>Foundation for Taxpayer and Consumer Rights (FTCR)
>today exposed internal oil company memos that show how
>the industry intentionally reduced domestic refining
>capacity to drive up profits. The exposure comes in
>the wake of Hurricane Katrina as the oil industry
>blames environmental regulation for limiting number of
>U.S. refineries.
>
>The three internal memos from Mobil, Chevron, and
>Texaco
>(available at
>http://www.consumerwatchdog.org/energy/fs/ show
>different ways the oil giants closed down refining
>capacity and drove independent refiners out of
>business. The confidential memos demonstrate a
>nationwide effort by American Petroleum Institute, the
>lobbying and research arm of the oil industry, to
>encourage the major refiners to close their refineries
>in the mid-1990s in order to raise the price at the
>pump.
>
>"Large oil companies have for a decade artificially
>shorted the gasoline market to drive up prices," said
>FTCR president Jamie Court, who successfully fought to
>keep Shell Oil from needlessly closing its
>Bakersfield, California refinery this year. "Oil
>companies know they can make more money by
>making less
>gasoline. Katrina should be a wakeup call to America
>that the refiners profit widely when they keep the
>system running on empty."
>
>"It's now obvious to most Americans that we have a
>refinery shortage," said petroleum consultant Tim
>Hamilton, who authored a recent report about oil
>company price gouging for FTCR. (Read the report at
>
>http://www.consumerwatchdog.org/energy/rp/
>
>To point
>to the environmental laws as the cause simply misses
>the fact that it was the major oil companies, not the
>environmental groups, that used the regulatory process
>to create artificial shortages and limit competition."
>
>The memos from Mobil, Chevron and Texaco show the
>following.
>
>-- An internal 1996 memorandum from Mobil demonstrates
>the oil company's successful strategies to keep
>smaller refiner Powerine from reopening its California
>refinery. The document makes it clear that much of the
>hardships created by California's regulations
>governing refineries came at the urging of the major
>oil companies and not the environmental organizations
>blamed by the industry. The other alternative plan
>discussed in the event Powerine did open the
>refinery
>was "....buying all their avails and marketing it
>ourselves" to insure the lower price fuel didn't get
>into the market. Read the Mobil memo at
>http://www.consumerwatchdog.org/energy/fs/5105.pdf
>
>-- An internal Chevron memo states; "A senior energy
>analyst at the recent API convention warned that if
>the US petroleum industry doesn't reduce its refining
>capacity it will never see any substantial increase in
>refinery margins." It then discussed how major
>refiners were closing down their refineries. Read the
>Chevron memo at
>http://www.consumerwatchdog.org/energy/fs/5103.pdf
>
>-- The Texaco memo disclosed how the industry believed
>in the mid-1990s that "the most critical factor facing
>the refining industry on the West Coast is the surplus
>of refining capacity, and the surplus gasoline
>production capacity. (The same situation exists for
>the entire U.S. refining industry.) Supply
>significantly exceeds demand year-round. This results
>in very poor refinery margins and very poor refinery
>financial results. Significant events need to occur to
>assist in reducing supplies and/or increasing the
>demand for gasoline. One example of a significant
>event would be the elimination of mandates for
>oxygenate addition to gasoline. Given a choice,
>oxygenate usage would go down, and gasoline supplies
>would go down accordingly. (Much
>effort is being
>exerted to see this happen in the Pacific Northwest.)"
>As a result of such pressure, Washington State
>eliminated the ethanol mandate - requiring greater
>quantities of refined supply to fill the gasoline
>volume occupied by ethanol. Read the Texaco memo at
>http://www.consumerwatchdog.org/energy/fs/5104.pdf
>
>Exxon's $10B fill-up: Cashing in on crunch
>By Brett Arends
>Wednesday, September 7, 2005 - Updated: 04:27 PM EST
>
>Oil companies came under new fire yesterday when it
>emerged that ExxonMobil's profits are likely to soar
>above $10 billion this quarter on the back of the fuel
>crisis.
> That's $110 million a day, and more net income
>than any company has ever made in a quarter. It's
>also
>a stunning 69 percent increase over the same period a
>year ago and a 34 percent jump from the $7.6 billion
>Exxon made just last quarter.
> ``Do you realize President Bush has just given a
>tax break to ExxonMobil?'' thundered Rep. Ed Markey
>(D-Malden). ``Of all the companies in the history of
>the world that needed a tax break, this month,
>ExxonMobil should be at the bottom of the list.''
>
>
> The law gives incentives to producers such as
>Exxon to expand production, such as for drilling for
>new wells in deeper waters in the Gulf of Mexico.
>http://business.bostonherald.com/businessNews/view.bg?articleid=101320
>
>Stossel: Price gouging ensures that scarce resources
>go only
>"to those who really need it"
>
>In his September 7 syndicated column, ABC News 20/20
>co-anchor John Stossel defended price gougers, writing
>that by charging $20 for a bottle of water to a person
>whose baby needed it to live, "the price gouger makes
>sure his water goes to those who really need it."
>Stossel added: "It was the price gouger's
>'exploitation' that saved your child." He justified
>this claim because price gougers -- people and
>companies that charge exorbitant prices for scarce and
>necessary resources (such as water or oil) -- "save
>lives" because they dependably provide those necessary
>goods or services to those who need them, motivated by
>their own self-interest to make money.
>
>A September 7 Wall Street Journal editorial
>(subscription required), titled "In Praise of
>'Gouging,'" also defended high oil prices and
>criticized
>anti-gouging laws.
>
>From Stossel's September 7 column:
>
> Consider this scenario: You are thirsty -- worried
>that your baby is going to become dehydrated. You find
>a store that's open, and the storeowner thinks it's
>immoral to take advantage of your distress, so he
>won't charge you a dime more than he charged last
>week. But you can't buy water from him. It's sold out.
>
> You continue on your quest, and finally find that
>dreaded monster, the price gouger. He offers a bottle
>of water that cost $1 last week at an "outrageous"
>price -- say $20. You pay it to survive the disaster.
>
> You resent the price gouger. But if he hadn't
>demanded $20, he'd have been out of water. It was the
>price gouger's "exploitation" that saved your child.
>
> It saved her because people look out for their own
>interests. Before you got to
>the water seller, other
>people did. At $1 a bottle, they stocked up. At $20 a
>bottle, they bought more cautiously. By charging $20,
>the price gouger makes sure his water goes to those
>who really need it.
>T
> The people the softheaded politicians think are
>cruelest are doing the most to help. Assuming the
>demand for bottled water was going to go up, they
>bought a lot of it, planning to resell it at a steep
>profit. If they hadn't done that, that water would not
>have been available for the people who need it the
>most.
>
> It's the price "gougers" who bring the water, ship
>the gasoline, fix the roof, and rebuild the cities.
>The price "gougers" save lives.
>http://mediamatters.org/items/200509080021
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